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Australian labour market needs boost

Andrew Drummond, AAP London Correspondent

Australia's workforce needs a boost akin to the Labor government's cash bonus payout or school halls stimulus program, says the head of an international recruitment agency.

Launching Hays' global skills index in London on Monday, chief executive Alistair Cox said that while Australia continues to suffer a shortage of workers with experience in the natural resources sector, the majority of the nation's labour market needs leverage.

"What we are hearing many of our clients saying is ... actually doing something to help pump prime those sectors outside of mining is what we need to do," Mr Cox told AAP.

"(The cash bonus) drove retail. It did help Australia to uphold jobs and drive its economy better than many other countries around the world.

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"And the school hall program, well, every school has a hall and it drove the construction industry. That's all washed through now and the construction industry is doing it tough."

While Australia posted average results across seven labour market indicators, the 2012 index results show the country continues to face pressure for growing wages for highly skilled workers, such as engineers.

"If you could somehow separate the mining sector from the Australian economy ... I think you would find an economy that finds itself in quite a difficult and fragile place," Mr Cox said.

"Basically, anything that's along the eastern states is pessimistic. But you go out to the mining areas and there's rampant inflation and associated sectors in huge demand."

Australia was not alone in its skilled labour force shortage, with 16 of the 27 countries assessed for the index found to be experiencing some form of market pressure.

To combat the mismatch of skills availability and demand, Hays recommends: the consideration of targeted immigration; fiscal incentives for employers to provide relevant training; and persuading young people to train in high demand areas.

While the Australian government has already made inroads to such schemes, Mr Cox said more can be done.

"Australia is coming into an election year and the government should be thinking about pump priming the economy," he said.

"The super-buoyancy of the mining sector has really fuelled the economy ... but we see areas that are in Sydney and Melbourne that are in a very tough marketplace right now, not strong at all. It is actually very difficult in many areas."

Hays has 245 offices in 33 countries, including bases in Australia and New Zealand.